NYC’s Vivaldi, Allied With Harvard and San Francisco VC Firm, Forge a New Way to Fight the Flu

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Vivaldi Biosciences is a rare and highly sought after property in New York City: a promising biotech startup. Why rare? Because office space is so expensive, and wet-lab space so hard to find, that most biotech companies that originate in NYC end up fleeing for some other city that has more to offer them. But Vivaldi’s far-flung startup team—which includes folks from NYC, Boston, and San Francisco—went to great lengths to keep the four-year-old company in the Big Apple.

Now Vivaldi is making strides towards reaching its first big milestone. Next quarter, the company hopes to get an application into the FDA to begin human trials of a novel flu vaccine—a product that Vivaldi executives believe could be the first truly effective vaccine in elderly people, who are most likely to suffer deadly complications from the virus. “Current vaccines leave 30 percent [of elderly people] unprotected,” says Elliott Kieff, a professor of medicine at Harvard who co-founded Vivaldi and now serves as chairman of its scientific advisory board. “What’s wonderful about this concept is it’s an entirely new strategy for attenuating the virus.”

Vivaldi’s technology originated at Mount Sinai School of Medicine in New York. Scientists Peter Palese and Adolfo García-Sastre discovered that a protein produced by a gene called Influenza NS1 prevents flu-infected cells from producing interferon. That’s a problem, because interferon really helps the human body fight off the flu, by blocking the virus from replicating.

The scientists went on to discover that deleting part of the NS1 gene essentially immobilized the flu virus, because it stimulated the cells’ interferon response, which then prevented the virus from reproducing. Studies in animals suggest that administering this mutant virus as a vaccine provides cross protection against multiple strains of the flu.

The technology could greatly streamline the annual flu-vaccine production process. Today’s vaccines are “trivalent,” meaning they raise immunity against the three influenza strains (two type A strains and one type B strain) that are expected to be dominant in the upcoming flu season. Vivaldi has generated a master truncated NS1 vaccine for all influenza A strains, and second one for all influenza B strains. The company is also developing rapid-production techniques that could make the vaccine useful in a pandemic, when huge quantities need to be produced and delivered to vaccination centers in a hurry.

The effort to turn Mount Sinai’s flu discoveries into a company started 3,000 miles away, in the office of Douglass Given (pictured above), a partner at Bay City Capital in San Francisco. Given, a scientist and physician trained in infectious diseases, had received his Ph.D. in Kieff’s lab. “I wanted to do something important in infectious disease,” Given says. He invited several biotech startups that were working in that field to make presentations to Bay City’s partners. “Nothing seemed quite right,” he says.

So Given consulted his old mentor Kieff. “I asked him, if he could make one contribution to infectious disease what would it be? He said he would improve the performance of the flu vaccine in the elderly, and that he believed it could be done with technology developed at Mount Sinai.” Around that time, Palese and García-Sastre published a journal article describing how they reconstructed and analyzed the now-extinct 1918 pandemic flu virus. Given was impressed. He approached Mount Sinai in 2006.

But licensing the technology from Mount Sinai to form a company came with some complications. The medical school had retained the rights to genetically engineer NS1 modifications in vaccine development, but licensed out other parts of the technology. So Mount Sinai spent 14 months structuring a relationship with Vivaldi that would allow it to use all the elements of the technology—a necessary step for the company to be able to raise venture capital, Given says.

In January 2009, Vivaldi raised a $23 million Series A, led by Bay City, with additional funding from NGN Capital, New York City Investment Fund, and Alexandria Real Estate Equities, which was building a science park on the east side of Manhattan at the time.

As the company started to take shape, Given struggled with the decision of where to put it. The most skilled scientific workforce was in his backyard in San Francisco, he figured. But moving Vivaldi there would take the company far away from its scientific founders. Given considered moving the company to Boston or Philadelphia, but with the urging of several New York institutions—including Mount Sinai and the New York City Investment Fund—Given agreed to leave Vivaldi stationed in the big city.

The East River science park wasn’t quite ready, so the startup team had to search for a property that could house a research laboratory. They settled on a vacant space at Bellevue Hospital Center in Manhattan. And much to his surprise, a single ad in Science magazine produced a wealth of qualified scientists. “We now have a workforce of 17, and they all live and work in New York City,” he says. Given says he’ll continue to commute back and forth from San Francisco to NYC until it comes time to hand over the CEO responsibilities to someone who can lead the company into its commercial phase.

The most immediate task for Vivaldi, though, is to design human clinical trials that will satisfy the FDA. Unlike most flu vaccines, which contain killed versions of the virus, Vivaldi’s molecule is a live virus. There is one other live-vaccine precedent: FluMist, made by Gaithersburg, MD-based MedImmune (which is now owned by AstraZeneca). Kieff and several members of Vivaldi’s scientific advisory board also worked with Aviron, the Mountain View, CA-company that originally invented FluMist. That experience will help them advise Vivaldi’s management throughout the regulatory process, Kieff says.

Although FluMist paved a path for approval at the FDA, Vivaldi’s journey will be far from easy. “The vaccine won’t get approved until it has been tested in thousands of people,” Kieff predicts. “Getting final approval will be a billion-dollar process,” and one that will someday require Vivaldi to team up with a better-capitalized Big Pharma partner, he says.

Given hopes the market potential in flu will attract Big Pharma to little Vivaldi, provided early human trials prove promising. He estimates that if the vaccine is approved, it could bring in sales of $1 billion a year by the mid-2020s, even if it is only used in the elderly population.

For now, Vivaldi’s small team is concentrating on preparing its FDA application to begin human trials. They also hope to raise a Series B by the end of the year, Given says. In terms of the decision to keep the company in New York, Given says he has no regrets. “We can manage our costs. We attracted an outstanding workforce,” he says. “New York leaves nothing to be desired.”